___________ is a function of the operating conditions faced by a firm and the variability these conditions inject into operating income and expected dividends.

Related MCQs

• Which of the following is/are true if a firm has a required rate of return equal to the ROE? I. The amount of earnings retained by the firm does not affect market price or the P/E. II. The firm can increase market price and P/E by increasing the growth rate. III. The P/E ratio is inversely proportional to the ROE of the firm.
• _______ measures the percentage of net income not paid to the shareholders in the form of dividends.
• _______ measures the percentage of net income not paid to the shareholders in the form of dividends.
• The difference between a random walk and a submartingale is the expected price change in a random walk is ______ and the expected price change for a submartingale is ______.
• Depending upon the investor’s preferences and the market opportunities an investor’s portfolio is the portfolio that I. Maximizes her expected utility. II. Maximizes her risk. III. Minimizes both her risk and return. IV. Maximizes her expected profit.
• The risk-free rate and the expected market rate of return are 0.06 and 0.12, respectively. According to the capital asset pricing model (CAPM), the expected rate of return on security X with a beta of 1.2 is equal to
• The risk-free rate and the expected market rate of return are 0.056 and 0.125, respectively. According to the capital asset pricing model (CAPM), the expected rate of return on a security with a beta of 1.25 is equal to
• Stock A has a beta of 1.0 and very high unique risk. If the expected return on the market is 20%, then according to the CAPM the expected return on Stock A will be:
• Common stock dividends are now taxed at a maximum rate of
• A stock that pays low or no cash dividends is